Robert Shiller of Yale University predicted the US housing crash in
2005, a year before it happened. He is quoted by the CBC as saying
that he is worried that we're now experiencing a slow motion version
of the US crash.
The same article cites Don Drummond, a former chief economist at TD
bank as saying the Canadian bubble is bursting right now.
You can read the whole story here:
Timing the market is difficult at the best of times, if not entirely
impossible. That's because economics is as much about psychology as
it is about number crunching. So long as people are convinced that
real estate prices are going to keep climbing, they'll dive into the
housing market even while bitching that prices are insane.
Then the worm turns and buyers choose to sit on the sidelines and wait
out lower prices.
Here in Quebec City I drive past condos where for sale signs are
sprining up like dandelions. I don't doubt that many of the units
were built pre-contruction by speculators looking to make a quick
buck. That's life, when you play the market...any market, there are
risks.
Given Canada's demographic make up with so many baby boomers heading
into their depends years I'm thinking it might be another 20 years
before we see real estate providing good value as a vehicle for
investment.
Warnings of a Canadian housing bubble have been around for at least
the past couple of years, but its been on the fringes with most
government types and so called market experts calling for contiued
price appreciation or the so called 'soft landing'.
By the time experts weigh in with bearish forecasts its likely too late for
those who bought in over the past few years, paying top dollar and
mortgaging themselves to the hilt.
Sometimes its worth reading pathetic little blogs.
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